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Chapter 7
The agile supply chain
Content
The concept of agility1.
Agile practices2.
The concept of Agility
 Key issueKey issue
11
What are the dimensions
of the agile supply chain?
The concept of Agility
 Market sensitive
 Supply chain is capable
of reading and
responding to real
demand
 Virtual
 I...
The concept of Agility
 Network based
 EDI and internet enable
partners in the supply
chain to act upon the real
demand
...
The concept of Agility
 Demand characteristics and supplyDemand characteristics and supply
capabilitiescapabilities
end-c...
The concept of Agility
 Demand characteristics and supply capabilities
DistinguishingDistinguishing
attributesattributes
...
The concept of Agility
Characteristic Lean Agile
Logistics focus Eliminate waste Customers and markets
Partnerships Long-t...
The concept of Agility
Source: Mason-Jones, Naylor and Towill (2000), Engineering the
leagile supply chain
The concept of Agility
Long lead time
Short lead time
SupplySupply
characteristiccharacteristic
ss
DemandDemand
characteri...
The concept of Agility
 Application of leagility: separation of ‘base’
and ‘surge’ demands
Source: Martin, Christopher and Denis Towill, An integrated model
for the design of agile supply chains
 Application of l...
 Application of leagility: the de-coupling point
approach
The concept of Agility
 Preconditions for successful agilePreconditions for successful agile
practicepractice

Enterpris...
Content
The concept of agility1.
Agile practices2.
Agile practices
 Key issueKey issue
11
How can we use agile practices
to benefit from turbulence in the
marketplace?
Agile practices
 Three characteristics of supply chain
operations related to agile
 Mastering and benefiting from variat...
Agile practices
 Benefiting from varianceBenefiting from variance
 Three sources of demand uncertainty

Seasonality

P...
Agile practices
 Benefiting from varianceBenefiting from variance
 Three sources of demand uncertainty

Seasonality

P...
Agile practices
 Benefiting from short time windowsBenefiting from short time windows
 Decreased D-time requires differe...
Agile practices
 Benefiting from small volumeBenefiting from small volume
 Small volume is a result of micro-markets,
cu...
Agile practices
 Benefiting from small volumeBenefiting from small volume
Variety
decrease
Volume
decrease
Mass productio...
An integrated model for enabling the Agile supply chainAn integrated model for enabling the Agile supply chain
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7 agile supply chain

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7 agile supply chain

  1. 1. Chapter 7 The agile supply chain
  2. 2. Content The concept of agility1. Agile practices2.
  3. 3. The concept of Agility  Key issueKey issue 11 What are the dimensions of the agile supply chain?
  4. 4. The concept of Agility  Market sensitive  Supply chain is capable of reading and responding to real demand  Virtual  Information-based supply chain, rather than inventory-based. Agile supply chainAgile supply chain
  5. 5. The concept of Agility  Network based  EDI and internet enable partners in the supply chain to act upon the real demand  Process integration  Collaborative working between buyers and suppliers, joint product development, common systems and shared information Agile supply chainAgile supply chain
  6. 6. The concept of Agility  Demand characteristics and supplyDemand characteristics and supply capabilitiescapabilities end-customers become more knowledgeable about product Lean supply chain Agile supply chain 1980’s 1990’s Efficiency, cost Responsiveness Focus
  7. 7. The concept of Agility  Demand characteristics and supply capabilities DistinguishingDistinguishing attributesattributes Lean supplyLean supply Agile supplyAgile supply Typical products Commodities Fashion goods Marketplace demand Predictable Volatile Product variety Low High Product life cycle Long Short Customer drivers Cost Availability Profit margin Low High Dominant costs Physical costs Marketability costs Stockout penalties Long-term contractual Immediate and volatile Purchasing policy Buy materials Assign capacity Information enrichment Highly desirable Obligatory Forecasting mechanism Algorithmic( 基于算法 ) Consultative( 基于咨 询 )
  8. 8. The concept of Agility Characteristic Lean Agile Logistics focus Eliminate waste Customers and markets Partnerships Long-term, stable Fluid clusters Key measure Output measure such as productivity and cost Measure capabilities, and focus on customer satisfaction Process focus Work standardization, conformance to standards Focus on operator self- management to maximize autonomy Logistics planning Stable, fixed period Instantaneous response Comparison of characteristics of lean and agile supplyComparison of characteristics of lean and agile supply
  9. 9. The concept of Agility Source: Mason-Jones, Naylor and Towill (2000), Engineering the leagile supply chain
  10. 10. The concept of Agility Long lead time Short lead time SupplySupply characteristiccharacteristic ss DemandDemand characteristiccharacteristic ssPredictable market Unpredictabl e markets PlanPlan andand controlcontrol JIT: pullJIT: pull schedulinschedulin gg React andReact and execute:execute: agileagile capabilitiescapabilities Hold inventory:Hold inventory: hedge and deployhedge and deploy
  11. 11. The concept of Agility  Application of leagility: separation of ‘base’ and ‘surge’ demands
  12. 12. Source: Martin, Christopher and Denis Towill, An integrated model for the design of agile supply chains  Application of leagility: the Pareto curve approach
  13. 13.  Application of leagility: the de-coupling point approach
  14. 14. The concept of Agility  Preconditions for successful agilePreconditions for successful agile practicepractice  Enterprise-level reality checkEnterprise-level reality check  Cost of complexity sanity checkCost of complexity sanity check  Lowering the cost of complexity: avoidingLowering the cost of complexity: avoiding overly expensive agilityoverly expensive agility  Forecasting: reduce the need for lastForecasting: reduce the need for last minutes crisesminutes crises  External: demand forecastExternal: demand forecast
  15. 15. Content The concept of agility1. Agile practices2.
  16. 16. Agile practices  Key issueKey issue 11 How can we use agile practices to benefit from turbulence in the marketplace?
  17. 17. Agile practices  Three characteristics of supply chain operations related to agile  Mastering and benefiting from variation in demand;  Very fast response to market opportunities;  Unique or low volume response.
  18. 18. Agile practices  Benefiting from varianceBenefiting from variance  Three sources of demand uncertainty  Seasonality  Product life cycles  End-customer demand Demandvariance Time
  19. 19. Agile practices  Benefiting from varianceBenefiting from variance  Three sources of demand uncertainty  Seasonality  Product life cycles  End-customer demand variety Volume Start up Micro-markets Organize Adjust Agile capabilityAgile capability is neededis needed
  20. 20. Agile practices  Benefiting from short time windowsBenefiting from short time windows  Decreased D-time requires different levels of agility (VMI & QR)  Speed of replenishment  Upstream time sensitivity  Information dissemination and alignment
  21. 21. Agile practices  Benefiting from small volumeBenefiting from small volume  Small volume is a result of micro-markets, customization and rapid responsiveness.  Three approaches of agile strategy related to small volume  Changeover flexibility  Modularity at the network level  Service-based and information-based solutions
  22. 22. Agile practices  Benefiting from small volumeBenefiting from small volume Variety decrease Volume decrease Mass production Flexibility Modular supply network Craft production
  23. 23. An integrated model for enabling the Agile supply chainAn integrated model for enabling the Agile supply chain

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